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Returning to India - How to sell (software, technology etc.) in India

2009-11-30T02:42:00Z

If you are looking to start any kind of company in India, remember this rule - "First generate revenue, then build a business. External funding of any kind is only to scale the business, not to start it". Innovation driven entrepreneurial ventures (unlike services companies or businesses that resell other products) are extremely hard in India. Given that it takes so much time to get things going, the first question most entrepreneurs need to think is "How quickly can my company generate revenue?".

If you are looking to get funded by Venture capital (and I know 5 VC's very well, to say this is the truth and the law). VC's in India will NOT fund any company without a proven and repeatable revenue model. Yes there are exceptions, and some VC's may fund the "show me momentum and traction" startup, but dont bet on it.

So that then begs the question, how do we sell in India?

If you are a consumer startup, charge people early, and often. If your business model is based on large number of users paying no money, then figure out who will pay for those large number of users. If your product or service is primarily based on selling to other businesses, then this post is useful for you.

1. Like any other place, businesses and people buy from people they know and trust. The hardest part is to start to build those relationships. Start early. If you are a local (from India) tap into your college/ school network. If you have worked/lived abroad for most of your working career, join your alumni organization. Chances are high that your college alumni network has a few folks in high positions at companies in India. I personally know of many alumni networks which have regional chapters in the large cities in India. Go meet and schmooze. There's no alternative. If you dont like doing that, get someone in your team who likes to do that.

India can seem like an old boys network and it will be that way until you crack the first few. Then you are in that "old boys network".

Some tips I have picked up while trying to sell in India - HR folks have time, no money. Sales & Marketing folks have money no time. If you get an appointment with a sales VP or head of sales and your product helps him/her, go out of your way to make it easy for them to buy your product in your FIRST meeting. I know this is different from "dont try to close in your first meeting" advice you get in the US, but it is what it is. Building a relationship takes time and most of these people dont have time. Make your value proposition compelling enough for her to say "Okay, if this does what you say it does, we will trial it for X days and pay you for it".

2. Quickly understand the company's culture. If you are trying to sell to a company which rarely uses consultants or outside help, realize it will take you very long to get the purchase order process completed. Most services companies (Wipro, TCS, not Infosys) prefer to use inside resources and will build software than buy it.

3. Remember the element of service tax. Its a 10% overhead you have to account for. If your product is to be sold for Rs. 100,000 realize you'll get that minus 10% which the company will keep and report as TDS. When you file taxes at the end of the year, you can apply for a refund, which you will probably get after 2+ years (if at all). So the best is to add that as an element in your quote. If you want to get Rs. 100,000, price your product at Rs. 111,111 so you get Rs. 100,000 after 10% tax.

Returning to India: A perspective on the "business" of India

2009-11-29T14:09:00Z

There had to be a strong impetus for me to return to blogging after almost a year. Its been a thrilling year and half since we returned to Bangalore after 15 years in the US. I had never worked in India before, so was a little apprehensive about it, but confident that an entrepreneur who can do well in the US, can pretty much do well anywhere.

After all the US market is possibly the most competitive, most difficult to navigate and the most alien to anyone from outside, right?

Well, after almost 2 years running BuzzGain from India, I can give you some insight into what we did well, what we did not and what we learned ourself. I was planning on a series of posts about this topic, and was just way too busy (or too lazy) to do it.

After getting this link to the NYTimes article on a few people's experiences on returning to India from several friends on facebook, I had to give a view into our experiences.

First the basics:

1. Each country has its pro's and cons according to me. I loved my experiences in America and wont give it up for anything. I have made the best of friends and have worked at some great companies with some excellent folks, while there. While some things bothered me in the US related to work - hiring was a pain, some developers were apt to adorn the "prima donna status", legal paperwork was expensive and the costs of getting a basic product was a lot (although its dropping), it was by and large good.

2. There was not a compelling reason for me to return to India. We (my wife and I) decided that our kids had to experience India at some point and the younger the better. Besides, our parents are all here and we thought it would be a good idea for the grandkids to hang out with them.

3. We dont have any plans to return to the US after "a 2 year expat gig". We have moved. Permanently.

Do we love it so much in India? No? But we are happy.

Are we open to come back to the US. Dont know. Right now, No.

Did we not like being in the Bay area? We loved it. Its very similar to Bangalore, in terms of weather, which made the transition easy for us.

I moved back with no expectations at all in terms of the working culture. Having heard about all the paperwork and bureaucracy in India, I expected it to be a pain to get anything done at all, let alone ship product.

1. Bureaucracy

Its true. All the paperwork and red tape, gets in the way. There's no better way of saying it. Expect everything to take 2 months more on average. The only saving grace is you can hire people to get things done. You'll end up paying for what should be "free" to get done, but you'll be better of paying for incorporation, "Getting a name approval" from the ROC, setting up basic infrastructure, etc.

2. Professionalism

Its hard even to say this is not true. You can expect some degree of professionalism from folks who have worked at large companies like Infosys, Wipro, or some other big Indian company for most parts. If you are looking for freelancers who can help you get your prototype done, dont expect it. It never has worked. I have had very poor experiences with consultants, who I expected to get some portion of work done in a given period of time (given that you pay them more). They either will email you a day before the work is due to tell you that their kid has extra homework that day so they have to help out or they have to attend their brother's friends wedding in a place where they have no Internet access.

3. Access to lots of great talent

Yes, this is true. Much as been written about how all the top talent in India prefers to work abroad, but there's still so many great people still here. The average student out of a tier 3-5 engineering school is still very motivated, hungry and diligent. The downturn (recession) has only helped hiring. We get good quality resources a fraction of the cost of what I have hired in the US.

Coming back to the article, the main points made were the bureaucracy, lack of follow up and professionalism, which has many who returned to India think twice and return back to the US. I think the points are valid, and India can be a challenge for most "outsiders". Anyone who has been outside India for over 15-20 years and thinks like an American will "expect" a certain work environment, will be sorely disappointed, even if they are "Indian". I say that in quotes because they really have not worked in India to know the ins and out of doing business here.

If you want to succeed in India, after you return, you have to think Indian which has 3 most important tenets (according to me):

1. Plan for everything to go wrong, hence have a back up for every scenario, including people.

2. There's always more demand than supply for most EVERYTHING in India, so if you want it badly, expect to pay a lot more to get it.

3. Surround yourself with people who can get stuff done that you dont like to do. Its not that you cant do it, its just that its not worth doing.

As a follow up, India is apparently a top 10 destination for expats.

How much do doctors in other countries make?

2009-07-16T02:05:00Z

The US doctor gets paid among the most. Even US nurses.

US Advertising spend by category and decline rates.

2009-07-14T15:19:00Z

Magna Media forecasts are out for US Ad spend. 2 great graphics are:

Invention versus Innovation

2009-07-08T17:00:00Z

“The gulf between invention and innovation is often a huge one that many entrepreneurs can’t cross,” said Scott D. Anthony, president of Innosight, a consulting firm.

Take the example of the 4 years it has taken GreenPrint to go from product to market. Amazing story of patience, persistence, and perseverance.

Innovation is far more about prospecting, mining, refining and adding value than it is about pure invention.

How to differentiate using a great positioning strategy and tell stories

2009-07-08T15:21:00Z

Organizational storytelling is slowly but surely becoming a hot strategy for conveying important information about any business, both internally and externally.

"Charts leave listeners bemused. Prose remains unread. Dialogue is just too laborious and slow. Time after time, when faced with the task of persuading a group of managers or front-line staff in a large organization to get enthusiastic about a major change, storytelling is the only thing that works."

Here is an awesome example of how Costco does it.

PC shipments and the Acer brand

2009-06-28T01:23:00Z

A 30% drop for Dell, 17% for HP but 7-8% drop for Acer during the last few quarters shows how Acer is taking marketshare away from DELL in the recent past. Amazingly they are only focused on one of the many markets - Notebooks and Netbooks.

Shows how transitions in product cycles can create opportunities for new entrants.

As a company, where would you go looking for new ideas? Innovation?

2009-06-26T12:32:00Z

The WSJ reports:

When companies try to come up with new ideas, they too often look only where they always look. That won’t get them anywhere.

The ideas are typically at the edge of a company’s radar screen, and sometimes a bit beyond: trends in peripheral industries, unserved needs in foreign markets, activities that aren’t part of the company’s core business. To be truly innovative, companies sometimes have to change their frames of reference, extend their search space. New ways of thinking and organization can be required as well.

InnoCentive.com is a site where people and companies look for help in solving scientific and business challenges. Posters of challenges sometimes offer cash rewards for solutions: Amounts have ranged from $5,000 to $1 million. The site began as an in-house tool for research scientists at Eli Lilly & Co. to help one another. Now it is independent, with Indianapolis-based Lilly as a founding shareholder.

Sometimes innovations arise when different departments talk to each other. But what’s the best way to start the conversation?

Many companies set up so-called communities of practice, which are typically internal Web sites where employees are encouraged to share knowledge and skills important to the company.

Teens and Media consumption

2009-06-25T15:53:00Z

Nielsen released the "How teens use media" report.

Its a fascinating read overall.

1. They are more focused - they view one media type at a time.
2. They have better recall - they tend to remember ads and consider ads as content (if good)
3. They read newspapers - really? No really!
4. Television is still the most dominant form of media for teenagers.
5. The most popular genres for U.S. teens are Evening Animation, Participation/ Variety and General Drama.
6. In South Africa, teens averaged more than five hours per day of TV viewing. In Taiwan, teens averaged just two hours and 47 minutes.
7. Beyond the first (TV) and second screens (Computer/Internet) , teens are increasingly watching video on their phones.
8. Teens browse less than half as much as the typical user
9. Sixty-seven percent of teen social networkers say they update their page at least once a week
10. More than half of all U.S. teen mobile subscribers (66%) say they actually prefer text-messaging to calling. Thirty-four percent say it’s the reason they got their phone.

Real Time search = the next frontier? Or just more of the same

2009-06-22T06:08:00Z

I was at the Buzz140 conference yesterday, in Chennai, organized by the effervescent Kiruba Shankar, Photon (Vasanth and others) and the knowledge conference. It was a one day Twitter conference attended by about 150 folks, many of whom were learning about twitter for the first time.

It was actually a trending topic on twitter for a brief few minutes. (Photos on Flickr) and some by tag.

There was event coverage in the local media - both the Hindu and Deccan Chronicle covered it briefly today.

There was a very interesting topic on Real time search and its implications on Twitter and Google. Many new players have emerged in the space like Topsy, almost.at and Scoopler.

Photo thanks to Keval Prabhu.